The Blog of
Nadine Dorries
Caught Short.
Posted Monday, 6 October 2008 at 15:06

On Saturday the following was written in the Financial Times: 

City leaders welcomed the appointment of Paul Myners as City Minister in the Lords, bringing a heavy hitter from the financial services sector into the government at a time of great challenges for the industry.

The former chairman of Marks and Spencer has stood down as chairman of Guardian Media Group.....

This is what I said in the same article:

The Conservatives attacked the appointment, drawing attention to his role as an adviser to GLG Partners, a hedge fund group.

Conservative MP Nadine Dorries said: "It beggars belief that Gordon Brown could appoint a man who is a director of the firm who took out the largest short position bet against Bradford and Bingley to be the minister responsible for regulating the short sellers. One day he criticises the practice of short selling, the next he appoints one of their high-priests to his Government."

Of course it's interesting that he's standing down as Chairman of the Guardian Group - no prizes for guessing where his political allegiances lie; some of us remember him as the other half of Stuart Rose, in the days when M&S failed in a way which can only be described as spectacular.

And, just who are these 'city leaders' because whoever they are, they should be blinking in the daylight and explaining to High Street UK exactly what they have been up to.

Not that I'm against selling short mind - it's an effective and quick way of realising the true value of a share when it's needed; however, like most instruments of good use in the City, its effectiveness has been corrupted by greed.

When trading short you have the ability to margin up, typically at 10 - 1.

An investor with £1000, can ' go short' for £10,000 by only spending 1k.

That margin is in fact a form of credit as the shares are actually borrowed . I think if we have learnt anything over the last few days, it's that it's credit, which is at the root of all evil.

If Paul Myners can be of any use, let's hope his first recommendation will be to cut the margin of greed in half to 5.

If the margin hadn't been so grossly large, the temptation to bail out on Bradford and Bingley may not have been so great.

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Nadine Dorries MP
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